Rent increases due for tenants of council owned properties

Rent increases due for tenants of council owned properties

Rent increases are on the way for tenants in council owned properties. Local councils are liable for the new property tax on their properties and Dublin City Council has informed councillors to increase their rent to recoup the additional cost of the new tax. 

With most local councils struggling to cut costs, they will have no alternative but to pass on the cost of the new property tax. In most countries property taxes are normally charged to the occupier but the Government decided to charge it to the owner of the property. This was probably driven mainly due to collection of the tax would be easier from the owner as they have an asset to charge any unpaid taxes to. But as with most costs related to supplying a service or goods, the costs will be factored in the price.

The property tax will also filter into cost of private rental accommodation. Landlords will have to pass on the charge which will come in the form of rent increases. Just because it is not charged as a separate bill such as utility bills, it does not mean that tenants will not end up paying the cost. But unfortunately this way it is less transparent.

In general rents in city locations are increasing and with the property tax due to be paid in July, these additional increases will start to filter in. This is going to lead to a problem for tenants receiving rent allowance.  The thresholds for rent payable were all lowered last year but with rents increases, these thresholds are starting to be too low for market rents.

This year we would expect that rent allowance tenants will start to find that they are priced out of the market as these thresholds become too low.  Unless these thresholds increase, tenant can find themselves taking unsuitable or substandard accommodation in order to get accommodation within their threshold.